1)purchased iphone from craigslist was told its a verizon version by the seller
2)popped in sim and it said its not a valid sim. i am thinking this is a sprint phone and i was tricked. Phone does show the bars but says can not be activated due to incompatible sim.
Phone is still not activated and i can not even mavigate to the home screen tried connecting with itunes etc
3)call apple and they confirm this is a sprint phone
4) call up sprint provide seriel number and imei and they say its not a sprint phone and they didnt mention if its stolen or reported stolen. I had asked this in bold in my email to sprint

So now i have a iphone 5 which i can nto activate . Its locked and lying as a paper weight

In the mean time i buy a AIR update to new os install itunes 8 etc etc
i decide to connect the iphone 5 just for fun and boom it says syncing and shows me the home screen. I am happy I do a quick song and dance sequence with 5 yo mama jokes. JK

Now when i go to general about i am super confused
Carrier says AT&T 13.0
Model is MD657LL (This is a sprint model number)
So which iphone 5 is this Friends ???????

Sprint and Verizon's unlocking policy keep the domestic GSM carriers locked out, so that will not work with any U.S. GSM carrier.

Verizon phone works with T mobile and smart talk. So much for your knowledge.

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To OP, you have a Sprint phone. This is exactly what happens with the sprint iphone 5 when trying to activate AT&T sim. If you had Verizon iphone 5, it would have worked. AT&T gsm network will work with the verizon phone, but you will not get LTE. With Sprint phone, nothing from AT&T will work unless you get Sprint to unlock the phone.

You definitely have a CDMA phone, it is not an AT&T phone. You need to call Verizon to activate it, you can't just put a SIM card in and expect anything to happen. It wouldn't work with an AT&T SIM because it's locked to a CDMA network (either Sprint or Verizon) which is preventing it from connecting to AT&T.